Intel Reorganizes

In late April, Intel announced plans to merge its Microprocessor Products and Architecture Business groups, combining its chipset research and development group with its more platform-oriented division to form the Intel Architecture Group (IAG). Paul Otellini, executive vice president, and Albert Yu, senior vice president, will oversee the IAG. The restructuring signals Intel's intention to set a more platform-oriented research agenda.
The IAG will focus on Internet products and integrating various Intel offerings into Internet-oriented packages. Intel is forming a dedicated 1000-person team for the IAG, which will receive about $100 million in funding.
The reorganization results in part from the company's failures to keep up with market demand for Intel Celeron and Pentium chips during the previous year. "We bit off an awful lot last year, developing Timna, Willamette, Itanium, and ramping supply, platform conversions on BX motherboards to 800 chipset families, RDRAM, and new graphic ports,” said Pat Gelsinger, Intel vice president and general manager of desktop products. With the reorganization, Gelsinger becomes chief technology officer. “Now we've reoriented ourselves to take on less and execute more and better," he said.
With the announcement, other divisions affirmed that Intel is wholeheartedly embracing the Internet economy. Intel spokesmen said that the company is intent on providing the chips for every device involved with the Internet, emphasizing the company's involvement with mobile-computing chips and wireless chips. Intel calls wireless “the second largest consumer of silicon next to PCs.”
Intel is also going after outsourcing marketplaces, such as the application service provider (ASP) marketplace. The company plans to have 10 data centers running under its hosting division, Intel Online Services, by the end of 2000. “Our intent is to get all the bits of the Internet running on Intel,” explained CEO Craig Barrett.